Market Verdict on Iron Ore：
• Neutral.
Macro:
• China National Bureau of Statistics: China PPI in December down 0.7% on the year, down 0.5% on the month. CPI up 1.8% in December, flat from last month.
• China’s regulatory authorities have preliminarily determined the list of high-quality developers to implement the “Balance Sheet Improvement Plan”, which includes Longfor, Gemdale, Country Garden, Seazen, Midea and Sino-Ocean. The plan included options to optimise debt structure and financing.
Iron Ore Key Indicators:
• Platts62 $124.00, +1.85, MTD $119.50. Downstream market of China approaching an end before Chinese New Year in late January. Both ports and seaborne trade return to quiet market. The winter iron ore stock for Chinese mills entered a end with Chinese New Year looming, with most of stocks were purchased in portside, with flexible size and time. Steel mills suffered negative production margin because the uptick of raw materials and low steel sales. The market expected a correction on iron ore with lower marginal demand.
SGX Iron Ore 62% Futures& Options Open Interest (Jan 11th)
• Futures 100,926,400 tons(Increase 2,674,700 tons)
• Options 73,800,100 tons(Increase 1,397,500 tons)
Steel Key Indicators:
• China Tangshan average billet cost 3890 yuan/ton, down 35 yuan/ton. Steel production loss at 50 yuan/ton, improved from 195 yuan loss last week.
Coal Indicators:
• Chinese northern cokeries plants believed that the market potentially reached a periodic low after coke price decreased 200-220 yuan/ton over the last two weeks, because of demand recovery after Chinese New Year, low supply and low inventories.